The Bank of England warned on Tuesday about "significant pressure" on households and businesses due to higher inflation and borrowing costs, but said they were more resilient than before the global financial crisis, Reuters reported. The BoE has previously flagged that Britain was entering a lengthy recession, and with inflation at a 41-year high and a sharp rise in interest rates over the past year, government forecasters have predicted a record squeeze on living standards.

Investment funds and other non-bank financial institutions face their first 'stress test' next year to apply lessons from the near-meltdown in Britain's pension fund sector, the Bank of England (BoE) said on Tuesday, Reuters reported. The BoE had to step in from September to buy 19.3 billion pounds ($23.75 billion) of government bonds to stabilise markets after turmoil caused by the fiscal plans of Liz Truss's short-lived government. Liability-driven investment (LDI) funds, used by pension funds to ensure their long-term payouts, struggled to meet collateral calls as bond prices tumbled.

Britain’s economy shrank in the three months through October, confirming the toll that rampant inflation and rising interest rates are having on business and industry, the Associated Press reported. Gross domestic product, the broadest measure of economic activity, fell by 0.3% in the period when compared with the three months through July, the Office for National Statistics said Monday.

The British government said Friday it would ease regulatory rules on banks, insurers and investors to bolster London’s status as a global financial hub after its allure was dented by Britain’s departure from the European Union, the Wall Street Journal reported. The U.K. presented a 30 point-plan called the “Edinburgh reforms” that the government hailed as a regulatory fine-tuning to boost the British economy, which has suffered a severe slowdown in recent years and is entering a recession.

The Bank of England looks set to raise interest rates to 3.5% or more next week, but policymakers appear increasingly split on how much tightening is needed to tame double-digit inflation as the economy heads into recession, Reuters reported. Last month BoE Governor Andrew Bailey said further rate rises were likely to be necessary, though fewer than financial markets had priced in before that meeting, when investors were betting rates would reach 5.25% in mid-2023.

England's Rugby Football Union (RFU) has rejected applications by the administrators of Wasps and Worcester seeking to prevent the automatic relegation of both clubs, saying the COVID-19 pandemic was not the primary reason for their financial woes, Reuters reported. Wasps and Worcester, who have both been suspended for going into administration, will now drop from the top-flight Premiership to the second-tier Championship in the 2023-24 season.

Britain's financial watchdog on Tuesday proposed tougher rules for approving financial promotions after a sharp rise in misleading marketing online, Reuters reported. Currently, marketing information can be approved by a firm regulated by the Financial Conduct Authority (FCA) without its direct nod. But under the new measures, which are part of a draft financial services and markets bill before the parliament, firms approving the promotions will have to show they have the right expertise.

Cineworld Group Plc said it intends to emerge from bankruptcy intact after senior lenders were said to be considering a sale process for its east European operations, Bloomberg News reported. The London-based company filed for chapter 11 bankruptcy in Texas in September to cut a near $9 billion pile of debt and leases. “Cineworld remains committed to working with its key stakeholders to develop a Chapter 11 reorganization plan that seeks to maximize value for the benefit of moviegoers and all other stakeholders,” a spokesperson said on Sunday.

U.K. finance chiefs finally know what’s coming: Higher taxes, the Wall Street Journal reported. Faced with a weaker currency, rising financing costs and surging inflation, finance executives’ already fraught budget planning was upended earlier this fall after the country’s government announced sharp, debt-funded tax cuts, only to withdraw them after the pound tumbled to a 37-year low and financial markets gyrated. Now, under a new prime minister, the government is pledging fiscal austerity, accompanied by an increase in the corporate tax rate to 25%.